How the spike in gold volatility is having a spillover effect

If you're of the belief that volatility ripples across asset classes, then you really have to pause and take serious note of this lift in volatility in gold.

Here's a chart of 30-day implied volatility and 20-day realized volatility for gold over the last three months:

Chart courtesy of IVolatility

Yes, that's about a 120% lift over the course of two sessions -- pretty remarkable stuff. The spike marked an 18-month high in gold volatility and basically the second-highest level of gold volatility since the global volatility spike in everything in 2008.

It pretty much dwarfs the 43% pop in the CBOE Market Volatility Index (INDEXCBOE:VIX), which was historically impressive in its own right.

And for what it's worth, the ratio of gold volatility to stock volatility hit its highest mark in the five-plus years we've had listed options on the SPDR Gold Trust (ETF) (NYSEARCA:GLD). Here's the CBOE Gold Volatility Index (INDEXCBOE:GVZ) versus the VIX: